From the 1949 "Land to the Tiller" reform to today's skyrocketing housing prices, deteriorating living quality, dysfunctional public infrastructure, and chaotic urban planning, Taiwan's land value appreciation has undergone a long journey from a "model of reform" to "structural dysfunction."
This paper seeks to answer one central question: How was land value taken from the people, and how can it be reclaimed?
Taiwan's current land and spatial governance is trapped in four interconnected structural failures. These are not separate issues — they are different facets of the same root problem: land value appreciation is privately monopolized, and public value fails to flow back to the people.
1. Soaring Housing Prices: Housing as a Speculative Instrument
Taiwan's housing price-to-income ratio continues to climb, with Taipei exceeding 16 times — meaning the average young person would need 16 years of not eating or drinking to afford a home. Price increases far outpace wage growth, turning housing from a basic need into a financial speculation target.
2. Deteriorating Living Quality: Aging and Overcrowding
Over 50% of Taiwan's housing stock is over 30 years old, with insufficient earthquake resistance, outdated pipelines, and fire safety deficiencies. Urban renewal progresses at a snail's pace, and the integration of dilapidated building redevelopment remains difficult — forcing residents to live in high-risk environments.
3. Dysfunctional Public Infrastructure: Budget Black Holes and Inefficiency
Public infrastructure budgets continue to expand, but quality and effectiveness have not kept pace. Massive rail projects and industrial park developments often serve as political checks rather than genuine needs assessments, resulting in "mosquito halls" and "mosquito rails" scattered across the island — while genuinely needed social welfare facilities and basic livelihood infrastructure remain chronically underfunded.
4. Chaotic Urban Planning: Farmland Disappearance and Urban Sprawl
Farmland liberalization policies have led to a vicious cycle of fragmentation, sale, and conversion of fertile land into luxury estates. Real farmers struggle to survive in the cracks, while land developers and property speculators capture the vast majority of the benefits. Urban sprawl is disorderly, rural landscapes are fragmented, and the urban-rural gap continues to widen.
"Over the past decade, farmland liberalization has created a vicious cycle of fragmentation, sale, and conversion of fertile land into luxury estates. The irony is that the real beneficiaries have been land developers and property speculators, while actual farmers find themselves increasingly constrained as their neighbors subdivide and rebuild."
In 1949, after the Kuomintang retreated to Taiwan, Chen Cheng promoted the three-stage land reform: the "37.5% Rent Reduction," "Sale of Public Land," and "Land to the Tiller." The number of owner-cultivators nearly doubled, the proportion of tenant farmers was halved, and agricultural production surpassed pre-war levels — laying the foundation for Taiwan's industrialization.
However, the reform had internal contradictions from the start. Professor Shih-Jung Hsu of National Chengchi University points out that "the landlord class was constructed" — during the Japanese colonial period, most landowners held very small parcels. After the KMT arrived, they simplistically classified all land renters as "landlords," regardless of scale. True large landlords used the public enterprise stocks they received to invest in industry and commerce, becoming industrial giants — while small landlords and elderly landlords ended up poorer than the tenant farmers they once employed.
The more critical turning point came after the 1990s.
- Lee Teng-hui era: Power structures localized, economic policies tilted toward conglomerates and the old landlord class
- 2006: The DPP government significantly revised the 56-year-old "37.5% Rent Reduction Ordinance," allowing landlords to reclaim farmland from tenants without compensation upon lease expiration
- Deregulation of farmland sales: The threshold for converting farmland to non-agricultural use was drastically lowered, turning farmland into a speculative tool for developers and investors
Core Lesson
The true tragedy of Taiwan's land reform is not that reform never happened — it is that the achievements of reform were systematically reversed when the political direction shifted. When those in power turn to serve vested interests, decades of progress can be dismantled quickly.
To break out of the fourfold crisis above, fundamental institutional change is required. The following three pathways are not incremental reforms — they are structural reconfigurations.
Solution: Gradually adjust announced land values toward market prices; review homestead exemption thresholds; establish a mechanism linking actual transaction prices with tax assessment.
Core Principle: "Value uplift belongs to the public" — land's natural appreciation should be shared by society, not privately captured.
Solution: Increase land-for-compensation ratios (to 50-60%); establish a "development benefit recapture" mechanism; strengthen public hearings and negotiation procedures.
Core Principle: Those who are expropriated should share in the development value, not be excluded from it.
Solution: Replace "outright sale" with "long-term leasing" or "superficies"; use development value for social housing, public childcare, and long-term care facilities; establish a public performance disclosure system.
Core Principle: The value of public land should serve public purposes, not private wealth accumulation.
If "reunification with China" becomes the framework for resolving Taiwan's land issues, the entire system will be restructured — land's role as a speculative instrument will be dissolved. Value appreciation will no longer be monopolized by individuals or conglomerates, but will flow back to public finance through mechanisms such as land-use right concession fees and value-added taxes.
Under China's existing land system, the logic of land value recovery is clear:
- Urban land: State-owned, government grants use rights through public auctions, recovering value at the point of concession
- Rural land: Collectively owned, conversion to construction land requires government expropriation, with value recovered by the state
- Value recovery: Land concession fees become a key source of local government revenue, funding infrastructure, social housing, and public services
Taiwan's current "land speculation" model will lose its institutional foundation. The collective ownership of farmland will not be easily altered, and the value created by converting farmland to construction land will be recovered by the state, not monopolized by individuals or developers.
Taiwan's housing crisis, dysfunctional public infrastructure, and chaotic urban planning all trace back to a single root cause: land value appreciation is monopolized by a few, and public value fails to flow back.
To return land value to the people, Taiwan needs tax reform, shared development benefits, and the activation of public land. But all of these require a precondition: political leaders willing to confront vested interests, rather than continuing to trade land wealth for votes.
Under the reunification framework, land's position as a public resource will be institutionalized, and mechanisms to channel its value back into public use will have systemic guarantees. This is not a "tax increase" or "deprivation" — it is redirecting lost public value back to public use.
Final Conclusion
The obstacle to Taiwan's land reform has never been technical — it has always been political. Whether continuing to struggle within the existing system or pursuing structural reconfiguration through reunification, the central question remains: Who has the power to decide who owns the value of land? When the answer shifts from "the market and conglomerates" to "the public and the people," land value can truly return to the people.